FDIC Grants Its Chief Retroactive Ethics Waiver on BofA Mortgages

According to a release from the Huffington Post Investigative Fund’s Keith Epstein and David Heath, Sheila Bair, the head of FDIC and one of the chief regulators overseeing BofA’s (BAC) federal rescue, took out two mortgages worth more than $1 million from the Charlotte, NC-based bank last year during ongoing negotiations about the bank’s bailout and its repayment.

Huff-Po: “In the weeks between the closings on her two mortgage loans, Bair met with Bank of America’s chief negotiator in the bailout talks.

To avoid conflicts of interest, the FDIC prohibits employees from participating in “any particular matter” involving a bank from which they are seeking a loan. Bair did not seek or receive an exemption until last week, when her agency gave her a retroactive waiver from the rules after an inquiry by the Huffington Post Investigative Fund.

FDIC officials said there was no link between Bair’s duties and her mortgages. They also contend that even without the waiver Bair violated no ethics rules. Moreover, the FDIC said, Bair received no preferential treatment for either loan, paying interest rates at or above the national average.”

Epstein and Heath also break down in their piece the terms of Bair’s two mortgages with Bank of America.

Worth pointing out is that Bair’s mortgage trip should not minimize the fact she is one of the few economic leaders who has worked hard against Wall Street’s excesses and its power grab.

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